India Linked to Chinese Shadow Network Used to Evade US Tariffs

Chinese exporters are utilizing a global "shadow network" across more than 40 countries—including India—to route goods into the United States and evade high trade tariffs, according to a recent report released by Washington officials.

To curb this trade evasion, federal officials are preparing to deploy artificial intelligence (AI) tools aimed at tracking illegal transshipment hubs, news agency PTI reported.

'The Great Transshipment Scam'
Peter Navarro, a top trade advisor to President Donald Trump, published a report titled ‘The Great Transshipment Scam.’ Navarro noted that after section 301 tariffs were levied against Chinese commercial practices in 2018, rerouted exports surged dramatically. The estimated value of goods entering the U.S. through third-party nations ranges between $40 billion and $303 billion annually.

Key Nations Implicated
The report identifies several major U.S. trading partners as hubs in China's shadow network, including Mexico, Canada, the European Union, India, Japan, and South Korea. According to Navarro, Chinese manufacturers ship goods to these secondary countries for minor processing, re-labeling, or repackaging to obscure their true origin.

The report specifically highlights India’s Pune-Gujarat-Chennai manufacturing corridor, noting its role in producing pumps and compressors that directly impact American supply chains in hubs like Cincinnati, Dayton, and Columbus.

Deploying 'Detective Border' AI
To counter these deceptive trade practices, Washington plans to roll out an AI-driven system called "Detective Border."

Using computer vision and advanced data analytics, the platform will cross-examine shipping manifests, routing histories, facility production capacities, and ownership ties to flag high-risk shipments. U.S. Customs and Border Protection (CBP) will leverage this intelligence to impose fines, collect back tariffs, or seize unauthorized imports.